OUTLOOK: Price Signal Summary - Bull Cycle In Gilts Remains Intact
Nov-05 12:28
- In the FI space, Bund futures are trading closer to their recent lows. Short-term conditions remain bearish. Note that the move down that started on Oct 17 still appears corrective and has allowed an overbought trend condition to unwind. Price has pierced a key support at 129.14, the 50-day EMA. A clear break of this EMA would signal scope for a deeper retracement and open 128.92, 61.8% of the Sep 25 - Oct 17 bull leg. First important resistance is 129.73, Oct 28 high.
- The trend structure in Gilt futures is unchanged, conditions remain bullish and price is holding on to its recent gains. Furthermore, moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 94.00. Clearance of this level would open 94.24, a 1.618 projection of the Sep 3 - 11 - 26 price swing. Note that the contract is overbought, a pullback would allow this trend condition to unwind. Initial firm support to watch 92.89, the 20-day EMA.
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